Recruiter.com Group, Inc.

Thank you, Operator. Good afternoon and welcome to Recruiter.com's first quarter earnings conference call. As a reminder, this call is being recorded and all participants are in a listen-only mode. We'll open the call for questions and answers following the presentation. On the call today are Recruiter.com's Chairman and CEO, Evan Sohn, CFO, Judy Crandall, and President and COO, Miles Jennings. The company would like to remind everyone that various remarks about future expectations, plans, and prospects made on today's call constitute forward-looking statements for purposes of the safe harbor provisions under this Private Securities Litigation Reform Act of 1995. Recruiter.com cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated earlier. including risks described in the company's violence with the SEC. Any forward-looking statements made on this conference call speak only as of today's date, Monday, May 16th, 2022. Recruiter.com does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today. A replay of today's conference call will be available through the investor relations section of Recruiter.com's website at investors.recruiter.com. With that, I'd like to turn the call over to Recruiter.com's Chairman and CEO, Evan Stone, for opening comments. Please go ahead.

Thank you, Kieran, and welcome to everyone on the call today. I will start the call today with a few high-level comments and then hand it off to Judy to review the financials. I will then go into some more details on our core business and miles to provide additional color around our clients. After that, we will open it up to any questions the audience may have. As we reported, we more than doubled our total revenue year over year, which was driven by a 339% increase in our recruiters on demand segment, an introduction of a recruiting software product. We also reported a 39% quarter over quarter improvement in adjusted EBITDA by controlling costs and improving margins. We're equally excited to report that our operating income increased 200%, and we are projecting to hit monthly EBITDA breakeven in the fourth quarter of this year. I am also pleased to announce that we signed a very exciting partnership with the fastest HR tech unicorn in history, which I will elaborate on later in this call. We are very excited with our growth trajectory and the enormous growth opportunity ahead of us. Judy will now go through the numbers, and I will go into some more specifics around how we are seeing the business develop. Judy, please go ahead.

Thanks, Evan. Revenue for the first quarter of 2022 totaled $6.9 million, a 117% increase compared to $3.2 million in revenue in the first quarter of 2021. This growth was primarily driven by significant changes in the revenue mix as the company's focus shifted to higher margin, faster-growing business segments. Gross profit for the first quarter of 2022 was $2.7 million, an approximate 200% increase compared to $0.9 million gross profit in the comparable period of 2021. The gross profit margin expanded to 39.2% compared to 28.7% a year ago. This increase reflects the shift in the sales mix to faster growing and higher margin business segments. Total operating expenses were $6.8 million compared to $2.8 million for the first quarter of 2021, an increase of 141%. The increase was primarily due to higher sales and marketing, product development, and general and administrative expense, as well as higher amortization of intangibles of $1 million compared to $159,000 in the year-ago period. Recruiter.com had a net loss of $4.2 million in the first quarter of 2022 compared to a net loss of $6.3 million during the corresponding three-month period in 2021. The net loss in the first quarter of 2022 includes non-cash items of depreciation and amortization expense of $1 million, bad debt expense of $19,000, and equity-based compensation expense of $1.7 million. Regarding our cash management and cash plan, on March 31st, 2022, Recruiter.com had $0.9 million in cash, cash equivalents and marketable securities and accounts receivable of $4.8 million. It should be noted that 42% of our accounts receivable is from our top 10 clients, including such Fortune 1000 companies as ADP, Unilever, Moody's, and Zoom, as well as California Corrections, Top Gaming Company Scopely, Telesign, and First Agency. We announced earlier this month a $3 million factoring facility with Bayview Funding, a subsidiary of Heritage Bank. As you see from our presentation, our Q1 cash burn was approximately $400,000 per month. This is a 42% improvement from Q4 of 2021. Our cash on hand as of tomorrow should be approximately $1.4 million, with an additional $1.4 million expected shortly from factoring. Once that hits, we would have cash of approximately $2.8 million. As we continue improving our cash burn, this should more than cover our working capital needs through the end of the year. And of course, we have an additional goal to improve cash collections, and we hope to reduce day sales outstanding from 79 to 42 days by year end. There were 14,784,000 common shares outstanding at quarter end, and management and insiders own approximately 14% of these outstanding shares. Now, Evan will wrap up with some additional guidance, but for Q2, we are guiding to a base case of $7.2 million in revenue or an increase of 5% from Q1 of 2022. Additionally, we expect a sequentially improved adjusted EBITDA loss, over Q1 of 2022. And with that, I will turn it back over to Evan. Thank you.